With the Bitcoin price moving upward after the announcement of several prominent ETF applications, a new wave of retail investors will make the decision to purchase their first crypto.
Many new crypto investors find the process of buying via an exchange challenging. For many a common question is ‘can you buy Bitcoin on Robinhood?’. The answer is yes. The Robinhood app allows account holders to easily trade over 5,000 different stocks, ETFs, options, gold, and crypto via its mobile app or web browser. Robinhood is available as a free download for Android, iOS and most popular web browsers.
Robinhood is raising interest rates once again for Gold members.
How To Buy Bitcoin with Robinhood
For anyone applying for a Robinhood account, the following requirements need to be met:
• Be 18 years or older
• Have a valid Social Security Number
• Have a legal U.S. residential address within the 50 states or Puerto Rico
• Be a U.S. citizen, U.S. permanent resident, or have a valid U.S. visa
Robinhood Crypto is available in 46 of the 50 US states. The restricted states are Hawaii, Nevada, New Hampshire, and West Virginia. Non U.S investors are geo-blocked from opening Robinhood accounts. While it would be possible to bypass this obstacle using a VPN, Robinhood is not an anonymous platform, and follows bank-like ‘know your customer’ onboarding procedures – requiring anyone wanting to open an account to also provide ID like a passport, a drivers license, a social security card or other US specific ID to do so.
1. Download and Set Up the Robinhood App: If you don’t already have the Robinhood app, download it from the App Store (for iOS) or Google Play Store (for Android) and create an account.
2. Fund Your Account: Before you can buy Bitcoin or any other cryptocurrency, you’ll need to fund your Robinhood account. You can do this by linking your bank account and transferring money to your Robinhood account.
3. Navigate to the Cryptocurrency Section: Open the Robinhood app and navigate to the cryptocurrency section. This is typically done by tapping on the "Investing" or "Crypto" tab in the app’s main menu.
4. Search for Bitcoin: Once you’re in the cryptocurrency section, use the search bar to find Bitcoin (BTC) among the available cryptocurrencies. It’s important to ensure you’re selecting the right asset as there are various cryptocurrencies listed on the platform.
5. Place an Order: After selecting Bitcoin, tap the "Trade" or "Buy" button. You can then choose the amount of Bitcoin you want to buy or specify the amount in USD that you wish to invest. Keep in mind that you can buy a fraction of a Bitcoin if you don’t want to invest the full amount for one whole Bitcoin.
6. Confirm the Trade: Review the details of your trade, including the purchase amount, any fees involved, and the current price of Bitcoin. If everything looks correct, confirm the trade to execute the purchase.
7. Monitor Your Investment: Once you’ve bought Bitcoin, you can monitor its performance in the cryptocurrency section of the Robinhood app. The app will display the current value of your holdings and any changes in their value over time.
Remember that cryptocurrency investments can be volatile and may involve risk, so it’s essential to do your own research and consider your risk tolerance before investing. Additionally, regulatory policies and features of trading apps can change over time, so it’s crucial to double-check the app’s functionality and rules before making any trades.
What Cryptocurrencies Can You Buy With Robinhood?
Besides Bitcoin, Robinhood app also supports trading of other popular cryptocurrencies, such as Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), Bitcoin Cash (BCH), Ethereum Classic (ETC), and Bitcoin SV (BSV). You can search for them on the app and follow the same steps as buying Bitcoin. However, keep in mind that not all cryptocurrencies are available in every state due to regulatory restrictions. You can check the availability of each cryptocurrency on Robinhood’s website.
What are Robinhood’s fees for crypto trading?
Whilst Robinhood and Robinhood Crypto advertise their service as commission free, there are still costs to trading on the platforms. In terms of Robinhood Bitcoin fees, one of the ways Robinhood makes money is off the spread, which is the difference between the best buy and sell price.
The size of the spread is a measure of the liquidity of the market, or how quickly and easily a trader can convert between cash and a cryptocurrency. Typically, there are smaller spreads for better known cryptocurrencies like Bitcoin, and larger spreads for lesser known cryptocurrencies.
Traders on Robinhood Crypto can also have the fees charged by cryptocurrency exchanges, brokers, market-makers, liquidity providers, or other types of cryptocurrency counterparties, trading venues, or intermediaries, passed onto them. These terms are stated in the Robinhood Crypto User Agreement, and allows Robinhood to pass on any fees they incur from buying and selling the underlying cryptocurrency to the traders.
What is the Robinhood crypto wallet?
The Robinhood wallet is a separate app from the Robinhood app and must be downloaded from the Apple app store. The wallet app is iOS only. There is currently no Robinhood wallet for Android. Described as a “portal to web3”, the Robinhood Wallet app is a self-custody wallet which gives users full control their crypto on the Polygon and Ethereum networks, while they hold and maintain their private keys. The company says more networks will be coming soon. Users can send and receive tokens from and to any address or exchange that supports Ethereum or Polygon transfers. You can also receive and store NFTs on the wallet – but sending is not available at this time.
Is your crypto safe on Robinhood?
Robinhood crypto uses industry best practices for storing and managing cryptocurrencies by dividing the crypto among a mix of cold (offline) wallets and hot (online) wallets. Most of the coins are kept in cold storage, with the rest being in hot wallets to support day-to-day operations.
Additionally, coin transfers need to be authorized by a select group of people, and Robinhood says this group is constantly being rotated to ensure a high level of security is maintained. The company does have a crime insurance policy, underwritten by Lloyd’s of London, that covers a portion of the assets held by Robinhood Crypto against losses from theft, including cybersecurity breaches.
That said, however, Robinhood Crypto is not a member of FINRA, and as such they are absolved from responsibilities and obligations that they would typically be subject to when providing trading services for equities. User funds are also not covered by the Securities Investor Protection Corporation, which protects stock purchases on Robinhood to the tune of $500,000, nor are they covered by the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits for up to $250,000 USD per customer.
Robinhood Crypto holds a BitLicense issued by the New York State Department of Financial Services (NYSDFS), which enables a company to conduct business activities related to cryptocurrency. The NYSDFS has only awarded seventeen of these licences since they were first introduced in August 2015.
Robinhood Crypto is also registered with the Financial Crimes Enforcement Network as a money services business. As such, Robinhood Crypto is subject to and complies with the applicable requirements of the Bank Secrecy Act, and complies with the applicable money transmitter laws of U.S. states.